Walworth County school districts struggle with funding formula

Rising property values in Walworth County generally are viewed as a good thing.

But not for school taxes.

In the Delavan-Darien and Whitewater school districts, property values have been rising, driving down state aid. To make up the difference, both districts have raised property taxes.

Both now collect more property tax per student than state equalization aid per student.

Although Whitewater and Delavan-Darien are the extreme examples (many districts in Rock and Walworth counties still collect more state aid than property tax per student), falling state aid and rising property taxes is a common scenario among 23 area school districts, according to Wisconsin Department of Public Instruction data.

On average, state equalization aid—the biggest pot of state aid sent to school districts—has declined steadily for area school districts from an average of $3,902 per student in the 2006-07 school year to an average of $3,727 per student for the 2009-10 school year.

That's an average decrease in aid of about 4.5 percent.

During the same period, per-student property tax collection by area school districts has risen 18.5 percent—from an average of $5,071

per student to $6,011 per student.

"Property values increase, particularly in places with lake property … and equalization aid drops, and we have to turn to property taxes," said Jim Strasburg, business director for the Whitewater School District.

The aid formula

School districts receive several kinds of state aid—some that can be used for a number of things and some that can be used only for specific programs. Most districts receive equalization aid, which can be used for a wide range of expenses.

Equalization aid and property values have an inverse relationship: Districts with low per-pupil property values receive more equalization aid, and districts with high per-pupil property values receive less equalization aid.

The Williams Bay School District, which has a lot of valuable real estate, has received zero equalization aid for the past two years, according to state data.

The Sharon School District, on the other hand, received equalization aid of $7,870 per student for the 2009-10 school year. That's the highest per-student amount among 23 area school districts.

'A desirable place'

In the Delavan-Darien School District, equalization aid per student has dropped more than 15 percent while the general fund property tax per student has risen more than 45 percent since the 2006-07 school year, according to state data.

Carey Bradley, business administrator for the district, said the culprit is increasing property values in the district and relatively flat enrollment.

"Our property value per member is going up," she said. "The state average (property value per member) is going up, but not as much. It makes us look more property wealthy than other districts in the state.

"Our number of students is not going up either," she said. "If you take the total property value divided by the number of students, each student has a greater share (of that tax base)."

0Walworth County Administrator Dave Bretl said the growth in property values—especially compared to the rest of the state—can be attributed to the fact that Walworth County is a "desirable place to move to."

A smaller pot

Bradley said another factor is the amount of money the state puts into the general aid appropriation fund.

The state has put less money into the fund over the last few years, she said.

It set aside $4.72 billion for the fund in 2006-07 and the same amount again in 2007-08. It put $4.80 billion into the fund in 2008-09 but only $4.65 billion in 2009-10. The amount of money available to school districts is down 1.5 percent since 2006-07, according to state data.

Shifting expenses

In the Whitewater School District, per-student equalization aid has dropped about 10 percent while the general fund property tax per student has risen more than 40 percent since the 2006-07 school year, according to state data.

Strasburg said property values in the district are rising but enrollment has remained relatively flat. The state wrongly assumes property value equals wealth, he said.

"It's not based on income, it's based on property value," he said.

Strasburg said another concern for districts in Walworth County since 2006 is the shift of special education costs from the county to the school districts.

Whitewater has added three special education teachers, or about $200,000 in expenses, he said. The district lost state aid as a result and levied property taxpayers to cover the costs, he said.

Bradley and Strasburg said many school districts are slogging through each budget year, trying to strike the balance between cutting costs and asking taxpayers for more money.

Strasburg said the districts that are faring well are those that are seeing increasing enrollment.

"The revenue cap is student-driven. The aid formula is student-driven," he said.